Failure by design

Intel has announced that it will cut 10% of its employees. This represents about 10,500 jobs and according to ThinkEquity Analyst Eric Ross, about a $3 Billion annual savings. This is likely a response to Intel’s dismal quarter and it’s need to improve margins. Intel has been attempting to focus on it’s core business following marketshare losses to AMD in the past few years and a huge fall in profitability. It has recently sold off its mobile chip division (Xscale), which has failed countless times to be profitable, to Marvell Technology Group. This will allow it to focus its attention on its main processor market.

Thiago Avila

AMD is currently dominating the performance, server and making inroads into the OEMs in the CPU industry. They have been taking market share since the introduction of the K7 Athlon and pushing Intel toward costly mistakes. AMD had long been relegated to making value oriented processor, but has recently been able to charge more for their processors due to the performance gain seen in the recent generation. Their biggest move has been releasing a 64-bit architecture (AMD64) which is both backwards compatible with current 32-bit systems and provides the performance benefits of 64-bit in the future. This differs greatly from the method employed by Intel with Itanium , a 64-bit only processor, which requires specially written software. AMD is currently planning to release Barcelona a native quad core processor in quantity in early 2007, as a response to the pending release of Core 2 Duo. (more…)